In the run-up to the Tennessee General Assembly’s passage of a bill earlier this year that will introduce online sports gambling in the state, emails of support with boilerplate language prepared by outside advocates started landing in the inboxes of lawmakers like State Sen. Raumesh Akbari.

One such missive in support of the legislation, which passed both chambers and which Gov. Bill Lee was cool to but allowed to go into effect as of July 1st, came from a South Memphis constituent of Akbari’s. Alluding to a U.S. Supreme Court decision last year that paved the way for states to introduce sports betting if they choose, the constituent’s email to Akbari began: “Now that states have the right to allow sports betting, I urge you to do whatever you can to bring mobile sports betting to Tennessee in a way that would allow me to have a variety of options for placing mobile bets.”

The email, prepared by the online advocacy company One Click Politics, continued by arguing on behalf of the Memphis resident who signed it: “I should be able to place bets directly from my phone or computer on platforms that I already know and trust. This is our chance to stop illegal offshore bookies and keep sports betting money right here in Tennessee, but that won’t happen unless there are a variety of options to choose from.”

Sounds like a no-brainer, when you put it like that. Outside interests and supporters, of course, jumped at the chance to try and sway lawmakers to vote in favor of the legislation — which Akbari co-sponsored in the Senate — for obvious reasons. Like the fact that this clears the way for a pile of new money to start flowing into the state’s coffers as well as finally getting to make legal bets in the state and tempting fate. Gambling is, essentially, simple. Your bet, no matter what game of chance you prefer, either pays off or it doesn’t. There are winners and losers, and all else flows from that basic duality. Everyone thinks they’ve got their shot, and the whole recession-proof wheel keeps spinning.

But it’s not quite so simple. The fact that online sports gambling is coming to Tennessee at all — in a form whose details and overseers are still to be finalized — is as much a defensive move as it is an attempt to simply loosen up a new money spigot, one that will generate an estimated $50 million each year, to be earmarked for education, local government use, and for treatment of gambling addiction, among other uses.

We call it a “defensive” move, because the introduction of sports betting also functions as a kind of window into understanding what’s become something of a zero-sum game among the proximate gambling markets of West Memphis, Tunica, and Memphis.

Welcome to the gambling industry’s version of a bare-knuckled brawl for your discretionary income, a fight that’s changing the landscape, the law, and the literal fortunes of those cities as well as the citizens within them as this competition unfolds. And it’s a competition that’s set to get even more intense.

This same kind of push is evident elsewhere in the country, such as via word in early August that the Washington Redskins would become the first NFL team to offer a gambling telecast of their games that includes cash awards to participants for correctly betting on in-game outcomes in the preseason, per the Associated Press.

Full gaming, of course, is not allowed in Tennessee, where Akbari says a pervasive conservatism has meant bills like the recent sports betting legislation haven’t exactly enjoyed the easiest of rides.

“I think a lot of people hope this will be an entryway [to more gambling], but a lot of people were also fearful of the legislation, because they don’t want it to be a pathway,” Akbari says. “Basically, I think this will allow us to be competitive with the states around us, like Mississippi and Arkansas, where there’s already sports betting.”

The new legislation will do that, plus a host of other things including measures to try and keep a lid on problem gamblers. Its wording along those lines is as follows: “The board shall promulgate rules that require a licensee to implement responsible sports wagering programs that include comprehensive training on responding to circumstances in which individuals present signs of a gambling addiction.”

Southland Casino Racing is upgrading for a bigger piece of the region’s market. / rendering courtesy Southland Gaming

To be sure, there’s nothing about the act of gambling that’s synonymous with an unrushed pace or plenty of time to consider matters — but that’s exactly what the state is also getting in tandem with the right to start participating in sports betting. The full pieces of this new gambling paradigm won’t be in place and allow for gambling until this fall, at the earliest. And maybe not even then.

When forecasting when a launch of sports betting in Tennessee will materialize, Pennsylvania can serve as something of a case study. It had a long-established casino industry in the state prior to its launch of sports betting, and once legislation was passed allowing the latter there, it took some 18 months until an actual launch materialized. Whereas Tennessee, of course, has no existing casino industry — which is why a launch in the early fall of 2020, roughly in time for the 2020-21 NFL season, is one reasonable guess for when things might finally get under way in Tennessee.

The idea behind the legislation that birthed this new reality in Tennessee is to generate new revenue for the state, while also allowing companies to set up gaming websites and smartphone apps so gamblers can bet on professional as well as collegiate sports. Those companies will pay $750,000 annually with the taxes they help generate distributed among local governments for things like infrastructure improvement, the state Department of Mental Health, and the state lottery board.

It’s something of an understatement to note that progress has come slowly in Tennessee as far as gambling is concerned. It took a voter referendum to make a state lottery finally legal almost 100 years after Tennessee lawmakers passed a ban on gambling in the state back in 1906. Two years after the lottery was legalized, the state attorney general’s office followed up with a clarification that poker remains illegal, though in 2010 state law legalized charity bingo events.

The implementation of sports betting in Tennessee also raises a pertinent question — how about those places nearby, where sports betting is already established?

How they’re faring at the moment, and what they may or may not stand to lose now that Tennessee is joining the fray, might actually surprise you.

TUNICA

Let’s start with our neighbor to the south. It cannot be overstated how important gambling as a whole has been to the fortunes of the north Mississippi town of Tunica that’s about a 45-minute drive from Downtown Memphis. Back in the 1990s, when casino gaming first arrived in Tunica, journalists could barely resist the abundant opportunity for puns — about how casinos had made a big splash in Tunica, and so forth — with the opening of the Splash Casino, a nightclub and gaming hall operating from a riverboat.

The transformation of Tunica was swift, and it was comprehensive. The surrounding county before the advent of casino gaming had been so poor it had at one point attracted the derisive nickname “America’s Ethiopia.” Then gambling brought casinos and the attendant businesses like hotels, restaurants, and the like, with the casino revenue washing over the landscape like a giant river of seemingly never-ending cash.

In the first five years of business there, Tunica County figures showed that annual county revenue had exploded from $3.5 million to almost $36 million. When the slots are spinning, green felt tables keep attracting bettors, and the gaudy neon lights keep shining, you’d be forgiven for assuming that things might just stay that way forever.

Suffice it to say, though, a lot has changed.

Depending on who you talk to, you’ll get varying answers for why gaming revenue has declined in recent years in Tunica — and why two casinos since 2014 have closed. Some blame the Great Recession and its effects that lingered for years, including the bruised psyche of individual consumers who may have been less inclined to fritter away money by facing off with Lady Luck. It’s a reasonable-sounding explanation. But it’s also reasonable to argue that Tunica is likewise feeling the effects of competition from around the country.

In the year or two just before the Great Recession hit, Tunica’s casinos were collectively bringing in a little more than $1 billion a year in revenue. One bellwether sign that things had begun to change, though, was the closure of Harrah’s Tunica in 2014, at the time, the largest of all of Tunica’s casinos. Shuttering it put almost 1,000 people out of work, and you can imagine all of the consequences that came next, like retail businesses being hurt, in turn, by all those out-of-work consumers changing up their spending habits.

As for the town of Tunica itself, its annual budget shrank from about $5 million in 2009 to $3.5 million this year.

“In 2007, you’re looking at Tunica as being probably in the top five gaming markets in the country, with $1.2 billion or more of gross gaming revenue,” says Mississippi Gaming Commission Executive Director Allen Godfrey. “But so many places have opened up since then and expanded their gaming market since then that Tunica has certainly felt a pinch. And then you add the Southland race park in West Memphis that’s continued to improve on their product. They’ve taken some business away from Tunica. Fast forward to 2018-2019, and we now have eight casinos between Tunica and Lula, Mississippi, with two closures in the Tunica market.”

Given that Tunica’s up-and-coming gambling competition to the northwest, West Memphis, is only 30 minutes or so from Memphis — give or take, depending on what part of the city you’re driving from — that adjacency to the Bluff City is no doubt among the reasons West Memphis is starting to come into its own as a gaming market. Among the more ominous signs for Tunica is a $250 million casino and hotel expansion under way now in West Memphis, not to mention a 2018 state referendum that paved the way for casinos, which will help position West Memphis as even more of a direct rival.

Some of the current realities of the gambling industry landscape actually have their genesis in the industry’s founding fathers — specifically, in their philosophy about the business. After World War II, it became clear to businessman William Harrah that, to survive, the casino business needed to think bigger. Which is why casinos quickly began to add amenities like ballrooms, hotels, restaurants, and the like — to appeal to a larger public than strictly gamers.

You see the byproduct of that at the moment in West Memphis. Where Southland Park Gaming and Racing, once known mostly for racing greyhounds on its track, added table games in April in addition to blackjack, roulette, poker, and more on its gaming floor.

Earlier this year, Southland Park Gaming and Racing officially changed its name to Southland Casino Racing, part of a massive redevelopment of the company’s casino complex that will ultimately include more games and a signature 300-room high-rise hotel. It’s a $250 million project that will provide a big boost to West Memphis, adding hundreds of permanent additional jobs at Southland.

“There’s a lot of pieces of this puzzle,” Godfrey says. “Tunica may have gotten caught in between some of these — between the expansion of gaming elsewhere, a recession, a flood. There’s been a lot of things that didn’t help them out. They’re down to probably $600 million now, so the annual revenue’s cut in half. But all of that said, there’s still good product in Tunica. Sports betting has come in and generated a lot of additional foot traffic. You’ve got some people in the Tunica market that are expanding their sports betting offering. All of this is good news.”

One interesting turn of events worth underscoring is that the most recent casino closing announcement in Tunica — the shuttering of the Resorts Casino Tunica  — will be the second since the state legislature allowed sports betting in Mississippi’s casinos last year.

The state of Mississippi’s annual gaming revenue has slipped from $2.9 billion to about $2.1 billion, according to Godfey, “with a majority of that loss being from Tunica.” Nevertheless, he adds that gross gaming revenue so far in Tunica is up 7 percent for the first three months of 2019, which he attributes to the additional foot traffic that sports betting has generated.

No wonder lawmakers in Tennessee, likewise, smelled an opportunity to try for a countermove.

“Sports betting functions as a kind of window into understanding what’s become something

of a zero-sum game among the proximate gambling markets of West Memphis, Tunica, and Memphis.”

“It’s not all a bad outlook for Tunica,” Godfrey says. “I think you’re always going to have some good gaming being conducted in the Tunica area. Is it what it used to be? No, you can’t argue that. Is it still a viable gaming market? Yes, it is. They’ve got some operators that have got a lot of experience and are very creative. In a free market system, the market writes itself. “Have we seen the last [casino] closing? I can’t say that we have. The corporations have to make a choice. If you’re publicly traded, you’ve got to do what’s best for your shareholders.”

TUNICA STRIKES BACK

To his point about Tunica operators getting creative, consider Gold Strike Casino Resort’s move at the end of July to open a new $7 million venue called the Moneyline Book, Bar & Grill, which is billed as “the next evolution of sports betting” in Mississippi. It’s decked out with more than 60 high-definition TV screens and wows guests with a massive video wall, bar, dining options, VIP lounge, a sportsbook, and a variety of entertainment options.

Gold Strike and MGM Resorts launched sports betting in the state in August 2018, and about a year on from that milestone the opening of the Moneyline bar represented a major upping of the ante, if you will, on a complete sports betting and entertainment experience for area gamblers. As you walk up to and inside the bar, you’ll see a long, digital ticker tape with sports stats scrolling by. Once you’re actually inside, you’ll see giant screens around you — two 16-foot-wide by 9-foot-tall displays, to be exact, which can be operated as 16 individual screens.

Under that viewing wall, some guests will no doubt want to spend a little time at the 50-foot-long bar (which includes 16 video poker machines). And in the adjacent 6,000-square-foot Race & Sports Book area, guests can settle into any of several tiered dining and seating areas which all offer great views of the sports action on the screens.

Sports betting will soon make its way to Tennessee. / photograph Kaspars Grinvalds

“With Arkansas and Tennessee now offering sports betting too, we believe we will be the only ones to offer an integrated sports entertainment experience at this level, that combines all of these aspects into one venue,” says Gold Strike President & COO David Tsai. “By offering new dining and entertainment, we hope to also drive a new segment of customers to Gold Strike who may not have visited us before or haven’t visited us for many years, so they can see that we continue to offer great new gaming experiences that are better than Arkansas or anywhere else.”

Tsai went on to note how Gold Strike decided to invest in the multimillion-dollar Moneyline facility to elevate the customer experience as well as the sports-betting experience. In full-pitch mode, he says that Moneyline combines all aspects of sports, including watching, betting, dining, and drinking. “We have over 60 HDTVs, multiple seating areas, a wide selection of beers,  cocktails and wines, and a diverse, globally inspired menu. This allows us to expand the first-class amenities we offer at our property in a way that no other place in Memphis or Tunica has done or likely will do.” 

Moneyline also includes two elevated VIP areas, where tables feature service that comes at the touch of a button — so you can tap, and have whatever you need delivered while keeping your attention fixed on the game. Moneyline also has a full menu, including a dozen beers on tap along with a cocktail and wine program.

“Our property already offers a fantastic upscale dining experience with Chicago Steakhouse, and a great seafood buffet experience at Buffet Americana that attracts long lines of people every weekend,” Tsai enthuses. “We saw that there was an opportunity both at Gold Strike and in the broader Memphis/Tunica area for a more casual restaurant that could be the best place to bet on and watch sports, but also was a hip place to eat great food and drink from a large beverage offering.

“Later at night, the venue becomes a lively, dynamic place to hang out and acts more like a restaurant and lounge, with a great music program that sets the mood.  We also plan to introduce live entertainment when football and basketball seasons are over.  We view ourselves as not being just in the gaming business, but in the broader entertainment business, and this new venue provides another great activity for our guests to do and ensure they have a great time while visiting us.”

WEST MEMPHIS

Which brings us, now, to West Memphis — and specifically to the ascendance of Southland, where General Manager David Wolf says his gaming hub is about to stake its claim for a greater share of the region’s gaming market than it’s aspired to in the past.

Part of that has to do with the $250 million expansion that will include a 20-story hotel tower with 300 rooms and 84 suites, along with a 1,300-space parking garage, which will open in the next 12 to 15 months.

“A lot of customers want to go to Tunica overnight, but they don’t want to drive,” Wolf says about Southland, which is only a 10-minute or so ride from Downtown Memphis. “They want to gamble, eat and drink, and we want to go after that customer in a way we can’t do right now, because we don’t have the hotel. And we’ll be adding new restaurants in conjunction with that.”

Earlier this year, Gulfport, Mississippi-based Roy Anderson Corp. won a $200 million contract to build Southland’s new casino and hotel project, with work under way now and set to wrap up in January 2021. The construction includes building a new 240,000-square-foot casino complex as well as the 300-room hotel. Last year, voters in Arkansas had approved the expansion of casino gaming as well as sports betting in the state, and progress has been moving forward regarding the latter. Which, again, represents another rival market to sports betting elsewhere, like in Mississippi and soon in Tennessee.

Arkansas’ state racing commission has already approved its sports betting rules, and Southland itself has been advertising that a sportsbook is “coming soon.”

MEMPHIS

Coming back to Tennessee, it still needs to take steps including the formation of a nine-member commission whose members would be appointed by the governor and confirmed by the legislature, which would serve as the regulatory body for sports betting activity here. At the time of this writing, Akbari confirmed the commission had not yet been appointed. “I think people are excited about the legislation,” she said. “Those that were opposed have moved on.”

One of those in opposition was Lee, who in a May 24th letter to former Tennessee House Speaker Glen Casada explained his rationale for why he decided to let the bill go into effect without his signature:

“I do not believe the expansion of gambling through online sports betting is in the best interest of our state,” Lee wrote, “but I appreciate the General Assembly’s efforts to remove brick-and-mortar establishments.

“This bill ultimately did not pursue casinos, the most harmful form of gambling, which I believe prey on poverty and encourage criminal activity. Compromise is a central part of governing, but I remain philosophically opposed to gambling and will not be lending my signature to support this cause. We see this issue differently but let me be clear: Any future efforts to expand gambling or introduce casinos in Tennessee will assure my veto.”

And that’s largely where things stand, for now. Tunica fights to recover some of its lost luster, West Memphis flexes its gaming muscles, and now Tennessee prepares to enter the fray. Not necessarily a Game of Thrones-style fight for supremacy, since there’s not one fixed Iron Throne equivalent to strive for. Each house, in this case, is actually a market engaged in something much trickier and fungible than a contest to decide a monarchy. It’s an all-out land grab for as many consumer dollars as possible, which is not a race something like a local government or gaming market can ever be said to win. It ebbs and it flows, but the race endures. When one market slides, a la recession-era Tunica, another rushes into the breach.

There are so many other branches likewise connected to the overall gaming narrative. Expectations of service levels never really go down among constituencies of a government — who ever hopes their city does less in a particular year? — and those services, everything from paying for education to police and fire crews, cost money. Gaming, if anything, can be defined by statistics and the odds that determine a lucky turn of the cards or not, which way the chips fall, and whether or not the slot rows line up in just the right order. Odds are, gamblers are only going to continue to have more options to choose from when it comes to how they’ll spend their money.